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Comparisons with Laws


ECONOMIC INSTRUMENTS
LAWS

Advantages

  • They allow each polluter to choose the most effective and efficient way of reducing pollution.
  • They provide an incentive to continue reducing pollution.
  • They minimise the cost of achieving pollution reductions.
  • They provide finance for other things including restoration of damage.
Advantages
  • They determine objectives and means independently of economic factors and market forces.
  • They are the surest means of preventing irreversible effects or a totally unacceptable level of pollution.
  • Their objectives, criteria and surveillance measures are widely understood.

Disadvantages

  • They depend on trial and error to get the charges right.
  • Setting up arrangements for supervising and measuring is expensive.

Disadvantages

  • They may not be the most cost effective way of ensuring standards are met.
  • They do not provide an incentive for polluters to do better than the standard.
  • They are generally difficult to administer and enforcement of standards depends on the resources available to the regulatory authority.
Ref: HRSEC 1987, pp14-15.

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© 2001 Sharon Beder